Economy/Resources - 213. page

Zhou Xiaochuan, the Director of the People’s Bank of China, spoke at China’s 3rd Economic Outlook Forum, which was held in Beijing on December 25, 2011. Zhou criticized the world’s three major credit rating agencies, Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, because they lack the capability of making predictions. According to Zhou, these credit rating agencies tend to exaggerate problems or achievements. If a company has a problem, these agencies make it look worse; if a company does well, they flatter it, making it into more than it is. Therefore, Zhou urged that China reduce its dependence on overseas credit rating agencies and support the development of China’s own, home-grown rating agencies.

Source: China National Radio, December 26, 2011
http://www.cnr.cn/jlfw/cj/201112/t20111226_508978096.shtml

Xinhua recently reported that the Chinese Academy of Social Sciences released the Social Bluebook it had recently compiled. According to the Bluebook, in the year 2011, the level of urbanization in China reached 50%. The 2010 national census indicated that, last year, the urban population reached 49.68%. This was the first time in a few thousand years that urban citizens outnumbered those classified as “farmers.” The Bluebook considered the moment a historic turning point and suggested that this may have a major impact in several social areas, such as the patterns of consumption, life styles, and value systems. The Bluebook also suggested that urbanization is becoming the second major economic engine after industrialization. However, urbanization is also believed to raise a number of social issues, such as the lack of labor protection and social security.

Source: Xinhua, December 19, 2011
http://news.xinhuanet.com/2011-12/19/c_111256953.htm

China Review News (CRN) recently reported on the central government’s new real estate development policies. The primary message on housing policies that came out of the recently held Central Government Economic Conference was to speed up the construction of affordable stock housing projects. The Conference confirmed that the current strategy on controlling the housing market will remain unchanged and that the government is sticking to the goal of restraining housing costs so they are kept down to a reasonably low level. All members of the Standing Committee of the Chinese Communist Party Central Committee Political Bureau attended the Conference.

Source: China Review News, December 14, 2011
http://gb.chinareviewnews.com/doc/1019/3/9/3/101939365.html?coluid=151&kindid=0&docid=101939365&mdate=1214160743

Xinhua quoted Japan Kyodo News and reported that 923,000 Chinese tourists visited Japan in November. The figure represented an increase of 35% compared to last November. November was the first month to show an increase since Japan’s earthquake. The main reason was believed to be that the Japanese government loosened the requirements for visa applications. Another factor was that the boat crash incident at Diaoyu island in November 2010 caused a decline in the number of tourists from China in that month.

Source: Xinhua, December 17, 2011
http://news.xinhuanet.com/overseas/2011-12/17/c_122438951.htm

For the Communist Party, the key word for the Chinese economy in 2012 appears to be “stability.” A Xinhua commentary echoed the theme of stability that was the focus of the recent Central Committee Working Meeting on the Economy. “Stability is the foundation of progress and has four key elements: maintaining the stability of macro-economic policy, the steady development of the economy, the stability of the general price level, and overall social stability.” Specifically, the commentary added, prudent monetary policy is expected and the steady development of the economy will hinge on the expansion of domestic demand, i.e., consumer demand.

Source: Xinhua, December 14, 2011
http://news.xinhuanet.com/politics/2011-12/14/c_111244198.htm

The International Herald Leader, a publication under Xinhua News Agency, published an article on December 12, 2011, blaming the Western countries for “draining” China of its real estate properties, stocks, and currency. According to the article, since last year, foreign institutions have been quietly selling their real estate properties. Since September this year, China began to notice the trend of property sales when Blackstone sold all of its properties in Shanghai. In November, Bank of America and Goldman Sachs reduced their shares in the Bank of China. Meanwhile, foreign capital has quietly retreated from the stock market. At the same time, high-end U.S. manufacturers are leaving China. The article speculates that once foreign companies start to sell RMB on a large-scale, the RMB will devalue and China’s economy will suffer from a hard landing. The article gave two suggestions to avoid a hard landing and “fight a financial war of defense”: 1) Sharply reduce the price of real estate properties before foreigners sell their properties in China on a large scale; 2) Depreciate the RMB before foreigners sell RMB on a large scale, thus letting foreigners’ hot money “become rotten in China.”

Source: International Herald Leader, December 12, 2011
http://news.xinhuanet.com/herald/2011-12/12/c_131295799.htm

People’s Daily reported on the 10th anniversary of China’s entry into the WTO (World Trade Organization). According to the report, China’s total foreign trade has grown by 21.6% annually since 2001. Standing as the largest exporter and the second largest importer in the world, China’s customs tariffs are now five times the level they were in 2001. Statistics show that, due to the decrease in international demand resulting from a sluggish world economic recovery, the rate of growth of China’s exports has been declining since August of this year. The authorities are fighting the downturn by adjusting the structure of exported goods, as well as by advancing the transformation of export companies. Those provinces that traditionally handle large numbers of exports are still responsible for over 80% of the country’s international trade.

Source: People’s Daily, December 11, 2011

http://paper.people.com.cn/rmrb/html/2011-12/11/nw.D110000renmrb_20111211_6-01.htm?div=-1

Guangzhou Daily recently published a report complaining that other countries have rapidly increased the technical trade barriers against Chinese exports. Estimates are that the direct financial losses due to these technical trade barriers have grown by 15% per year over the last several years. Last year, the figure was US$58.2 billion. In addition to traditional trade barriers such as tariffs and quotas, ASEAN (The Association of Southeast Asian Nations) countries have adopted more and more technical trade barriers against China. China’s three largest trade partners (Europe, the U.S. and Japan) have recently imposed more and more complicated technical requirements on Chinese products. For example, Chinese rice exported to Japan faces 579 technical inspection items.

Source: Guangzhou Daily, December 11, 2011
http://gzdaily.dayoo.com/html/2011-12/11/content_1554950.htm